After a federal appeals court panel voted to shelve Johnson & Johnson’s Texas two-step strategy in its years-long talc litigation, the first plaintiff has stepped up to tango at trial.
Following a hold on nearly 40,000 lawsuits alleging J&J’s talc products cause cancer, U.S. bankruptcy judge Michael Kaplan on Tuesday agreed to let plaintiff Anthony Hernandez Valadez proceed with his case against the drug behemoth in California, multiple news outlets have reported.
“The pendulum has swung” against J&J and the bankrupt subsidiary it hoped to use to divert the lawsuits, LTL Management, Kaplan said at a hearing in Trenton, New Jersey, as quoted by Bloomberg.
J&J queued up its controversial Texas two-step ploy in October 2021, creating LTL as a holding company for talc litigation cases and then declaring the firm bankrupt. Last February, Judge Kaplan affirmed the ability of J&J’s use of Chapter 11 to hasten a settlement that would free the company from the deluge of claims over its talc marketing.
Kaplan’s ruling froze all outstanding talc litigation while J&J pursued a settlement.
Talc plaintiffs were quick to challenge J&J’s maneuver, however. And late last month, a federal appeals panel voted unanimously to cut Johnson & Johnson’s Texas two-step short. J&J is appealing the decision, but if things don’t go its way, the company could face many more cases at trial.
If the court refuses a rehearing, LTL could opt to further delay the bankruptcy dismissal by appealing to the U.S. Supreme Court, Reuters reports.
As for Hernandez Valadez, the 24-year-old plaintiff sued J&J last year after being diagnosed with a malignant tumor. At the time, Kaplan stopped short of allowing the case to proceed to trial while J&J and LTL’s bankruptcy case was ongoing.
The appeals court ruling is temporarily on hold while J&J appeals, which means cancer victims still need special permission to bring their cases to trial for the time being, Bloomberg points out.
J&J’s costly history of talc verdicts shows why the company would rather avoid going to trial. While the company has been able to get many trial verdicts overturned in appeals, the drugmaker had to pay more than $2 billion after a trial combining 20 plaintiffs’ claims went against the company.